NC Budget and Tax Center

Local School Systems Face Challenging Budget Environments for Upcoming School Year

As local school boards begin to plan K-12 budgets for the coming school year, they continue to feel the squeeze from a still-fragile economy and continued cuts in state support for public education. Since FY2009, state support for K-12 education has been cut by more than $1.3 billion and Governor McCrory’s proposed budget for FY2014 continues this trend with $85 million in cuts to K-12 education.

The budgeting environment will likely be even more challenging for the upcoming school year with the expiration of one-time federal funding. North Carolina received $297 million in federal dollars for K-12 education (“Ed Jobs” funding) as part of the American Recovery and Reinvestment Act approved by Congress in 2010. All local school systems received Ed Jobs funding, which was used to retain existing employees, recall or rehire former employees and to hire new employees. Local school systems were required to spend all Ed Jobs funds by October 2012 and no additional funding will be available for the upcoming school year.

These federal dollars helped keep teachers in classrooms and combat significant state-level cuts to K-12 education in the wake of the Great Recession. The Department of Public Instruction reports that for FY2011, more than 5,470 teacher positions were funded using Ed Jobs dollars. These Ed Jobs dollars will need to be replaced with state and/or local funding, or local school boards will have to reduce resources available for educating North Carolina students.

The overall impact of the expired Ed Jobs funding is difficult to assess for the upcoming school year. Local schools systems used the funds differently to meet respective budget challenges. While some schools systems used most or all of the one-time federal funding in a single school year, other systems allocated the funding across multiple school year budgets. Thus, the impact of the expired federal funding on local schools and classrooms will likely vary.

The governor’s proposed budget for FY2014 does not replace Ed Jobs dollars, meaning local schools boards will be responsible for addressing this potential budget gap. Disparities in the economic vitality of local communities across the state mean that some local school systems will likely be able to fill this budget gap while economically distressed communities will likely not be able to do so. North Carolina simply cannot expect to build a world-class workforce that can compete for good paying jobs without making an adequate investment in public education.

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